Chapter 5



Chapter 5. How to Process VA Loans and Submit Them to VA

Overview

|In this Chapter |This chapter contains the following topics. |

|Topic |Topic name |See Page |

|1 |Refinancing Loans |5-2 |

|2 |Processing Procedures |5-3 |

|3 |How to Submit Loan Documents to VA |5-5 |

|4 |Prior Approval Loan Procedures |5-6 |

|5 |Automatically Closed Loan Procedures |5-15 |

|6 |Submit “Other Necessary Documents” |5-19 |

1. Refinancing Loans

|Change date |September 15, 2004, Change 4 |

| |This section has been changed to create subsection lettering. |

|a. Where to Find |This chapter applies, for the most part, to non-refinancing loans. |

|Information | |

| |Reference: See chapter 6 for information specific to refinancing loans. |

2. Processing Procedures

|Change Date |September 29, 2008, Change 7 |

| |This section has been renamed Processing Procedures. |

|a. Order of Completion |The procedures discussed in this section may be initiated and completed in any feasible order, as long as they are|

| |all completed prior to loan closing. These procedures apply to both prior approval loans and loans closed |

| |automatically (except the procedure which specifically refers to prior approval loans). |

| | |

| |To avoid delays in closing, it is recommended that the lender take the following actions in the very early stages |

| |of loan processing: |

| | |

| |Request VA Form 26-1880 for a Certificate of Eligibility (COE), if the veteran does not already have one (See |

| |chapter 2), |

| |Request assignment of an appraiser (See chapter 10), |

| |Initiate CAIVRS and VA-indebtedness searches (See section 6 of chapter 4), and |

| |Request credit report and verifications (See chapter 4). |

|b. Obtain Certificate of |Verify the veteran’s eligibility for home loan benefits and amount of available entitlement by obtaining a COE. |

|Eligibility | |

| |Ensure any conditions of the COE are satisfied. |

| | |

| |Reference: See chapter 2 for details. |

|c. Establish the |Obtain a VA Notice of Value (NOV) through The Appraisal System (TAS) or VA Form 1843a, Master Certificate of |

|Reasonable Value of the |Reasonable Value (MCRV), see chapter 10. |

|Property | |

| |Obtain evidence of compliance with any NOV requirements. |

Continued on next page

2. Processing Procedures, Continued

|d. Determine Whether VA’s|Determine whether the applicant meets VA’s occupancy requirement. The loan cannot be made unless the requirement |

|Occupancy Requirement is |is met. |

|Met | |

| |Reference: See section 5 of chapter 3. |

|e. Underwrite the Loan |Complete the procedures, verifications, and loan analysis described in chapter 4 of this handbook. |

|f. Fulfill Requirements |Ensure every active duty service member who applies for a loan is counseled through the use of VA Form 26-0592, |

|for Active Duty Members |Counseling Checklist for Military Homebuyers, as early as possible in the transaction. |

| | |

| |Lenders should furnish these forms to real estate brokers and builders with whom they deal and request their |

| |assistance in providing counseling. |

| |The applicant’s signature on the form signifies that counseling has been completed. |

| | |

| |Ensure an applicant, eligible as an active duty member, is still on active duty at the time of closing if the |

| |Certificate of Eligibility indicates “Valid unless discharged or released subsequent to date of this certificate. |

| |A certification of continuous active duty as of the date of note is required.” If the lender becomes aware that |

| |the applicant is no longer on active duty, the loan may not be closed unless VA re-establishes the veteran’s |

| |eligibility. |

|g. Obtain Certificate of |Submit all prior approval loans to VA. |

|Commitment on Prior | |

|Approval Loans |Obtain a VA Certificate of Commitment. |

| | |

| |Ensure compliance with any conditions of the Certificate of Commitment. |

| | |

| |Reference: See section 4 of this chapter for details. |

3. How to Submit Loan Documents to VA

|Change Date |September 29, 2008, Change 7 |

| |Subsection a has been renamed and includes instructions on when to submit documents. |

| |Subsection d has been changed to provide updated guidance regarding the use of imaged documents. |

|a. Where and When to |Generally, lenders only need to submit documents to VA when the loan requires prior approval or VA requests copies|

|Submit Documents |of the origination package for full review. Lenders are strongly encouraged to use the webLGY application |

| |accessed via the VA Portal (see section 5 in this chapter) when requesting guaranty. |

| | |

| |See Appendix A for a list of VA offices and their jurisdictions. |

|b. Loan Number |A 12-digit VA Loan Identification Number (LIN) is assigned to each loan by VA at the time the appraisal is |

| |requested. Use this number electronically in VA systems or where requested on VA forms and other documents. |

|c. Who Can Sign Documents|Under certain circumstances, VA requires specific parties to execute documents. For example, a VA-approved |

|for the Lender? |underwriter must approve or disapprove a loan for a nonsupervised automatic lender. |

| | |

| |Where VA does not have a specific requirement, branch managers, employees, and agents of the lender or holder may |

| |execute VA forms in the name of, and on behalf of, the principals. |

|d. Use of Imaged |When submitting loan documents to VA, lenders may use imaged documents. However, in contrast, lenders must submit|

|Documents |the original Certificate of Eligibility and security instrument. In the event of an onsite VA audit of closed |

| |loans, lenders must be able to provide the audit team members with printed copies of requested files or on-line |

| |access to records at the auditor’s request. |

| | |

| |Note: Lenders are expected to continually monitor the integrity of their imaging system to ensure consistent |

| |quality and to prevent unauthorized alternation or destruction of records. |

4. Prior Approval Loan Procedures

|Change Date |September 29, 2008, Change 7 |

| |Subsection a removed cooperative loans from the list of loans requiring prior approval. |

| |Subsection c, step 2, has been changed to delete references to form numbers for Certificates of Eligibility. |

| |Subsection j has been changed to delete the requirement for VA Form 26-0285, VA Transmittal List, and the VA |

| |Funding Fee receipt. VA Form 26-0285 is no longer required and funding fee information is now automatically |

| |captured in VA systems. The subsection has been renumbered. |

|a. Which Loans are |Lenders without automatic authority must submit all loans to VA for prior approval, except IRRRLs made to |

|Submitted for Prior |refinance loans that are not delinquent. |

|Approval? | |

| |All lenders, whether or not they have automatic authority, must submit the following types of loans to VA for |

| |prior approval: |

| | |

| |Joint loans. |

| |Loans to veterans in receipt of VA nonservice-connected pension. |

| |Loans to veterans rated incompetent by VA. |

| |Interest Rate Reduction Refinancing Loans made to refinance delinquent VA loans. |

| |Manufactured home loans (except when the manufactured home is permanently affixed to the lot and considered real |

| |estate under state law), unless the lender has been separately approved for this purpose. |

| |Unsecured loans or loans secured by less than a first lien. |

| |Supplemental loans. |

| | |

| |Note: VA Form 26-8937, Verification of VA Benefits, will indicate whether the veteran receives VA |

| |nonservice-connected pension or has been rated incompetent by VA. See “Debt Related to VA Benefits” in section 6 |

| |of chapter 4. |

Continued on next page

4. Prior Approval Loan Procedures, Continued

|a. Which Loans are |Lenders with automatic authority may also elect to submit a loan (of a type not on the above list) for prior |

|Submitted for Prior |approval when issues or circumstances cannot be resolved by the lender’s own underwriting staff. |

|Approval? (continued) | |

| |The submission must include the underwriter’s analysis and explanation of why it is being submitted for prior |

| |approval. |

| |Do not use this provision to shift the burden of a loan denial to VA. |

|b. Before Requesting |Before submitting the loan documents to VA for prior approval: |

|Prior Approval | |

| |Establish the reasonable value of the property (appraisal). |

| |Underwrite the loan (See chapter 4). |

| |Ensure active duty members receive counseling using VA Form 26-0592. |

|c. How to Request Prior |Submit the following documents to VA in the order listed. |

|Approval | |

|Order |Document |

|1 |Lender’s cover or transmittal letter (if used). |

|2 |Certificate of Eligibility. |

|3 |URLA (Uniform Residential Loan Application) with revised VA Form 26-1802a, HUD/VA Addendum to URLA. |

| | |

| |These forms must be signed and dated. |

| |These forms must be properly completed and legible, but do not have to be typed. |

|4 |Interest Rate and Discount Disclosures Statement. |

|5 |VA Form 26-0592, Counseling Checklist for Military Homebuyers, if applicant is on active duty. |

|6 |VA Form 26-8937, Verification of VA Benefits (if applicable). |

|7 |VA Form 26-6393, Loan Analysis. |

|8 |All original credit reports obtained in connection with the loan and any related documentation. |

Continued on next page

4. Prior Approval Loan Procedures, Continued

|c. How to Request Prior Approval (continued) |

|Order |Document |

|9 |VA Form 26-8497a, Request for Verification of Deposit, and other related documents (Alternative |

| |documentation: Original or certified true copies of the last 2 bank statements). |

|10 |VA Form 26-8497, Request for Verification of Employment, and other verifications of income such as |

| |pay stubs and tax returns. |

| | |

| |Reference: See section 2 of chapter 4. |

|11 |Purchase/earnest money contracts. |

|12 |Notice of Value (NOV) and any special requirements or conditions applicable to the property. |

| |VA Form 26-1843a, Master Certificate of Reasonable Value (MCRV), if applicable, with any applicable |

| |endorsements and/or change orders. |

| | |

| |Highlight to show lot and block identification, house type valuation, and optional equipment |

| |applicable to veteran’s purchase. |

|13 |The original Freddie Mac Form 70/Fannie Mae Form 1004, Uniform Residential Appraisal Report (URAR), |

| |including all addendums, photographs and any document(s) revising or correcting the fee appraiser’s |

| |original URAR. |

| | |

| |Note: The URAR and attending information are not required when VA Form 26-1843a, MCRV, is |

| |submitted. |

|14 |Any other necessary documents. |

| | |

| |Reference: See section 6 of this chapter. |

Continued on next page

4. Prior Approval Loan Procedures, Continued

|d. What Happens Next? |VA will review the documents submitted and do one of the following: |

| | |

| |Suspend processing and request additional information from the lender, |

| |Send a notice of denial to the lender and applicant, or |

| |Issue VA Form 26-1866, Certificate of Commitment, to the lender, evidencing approval of the loan. |

|e. Certificate of |The Certificate of Commitment is the lender’s evidence of VA’s approval of the loan. The lender is subsequently |

|Commitment |entitled to evidence of guaranty if: |

| | |

| |The closed loan is identical in all respects to that submitted to VA on the URLA and described on the Certificate |

| |of Commitment (or, if not identical, any required VA approval of changes was obtained prior to closing), and |

| |The lender has complied with all applicable provisions of the law and loan guaranty regulations in making the |

| |loan. |

| | |

| |If, at any time prior to closing, the lender or VA has reason to doubt the continued qualification of the loan, |

| |the lender will delay closing until all facts are determined. |

| | |

| |VA may cancel a commitment if the validity period of the Certificate of Commitment has expired and there is no |

| |reasonable expectation that the loan will be reported for guaranty. |

Continued on next page

4. Prior Approval Loan Procedures, Continued

|f. Changes Occurring |Generally, changes to the loan occurring between issuance of the Certificate of Commitment and loan closing must |

|After Issuance of the |be approved by VA. The following table lists: |

|Certificate of Commitment| |

| |Exceptions to VA’s prior approval of changes requirement, and |

| |Circumstances that warrant special instructions. |

|If … |Then … |

|An increase in the amount of down payment decreases the |No VA approval is needed. |

|loan amount (with or without a reduction in the term of | |

|the loan) and there is no increase in the monthly |Include an explanation of the change with the closing |

|mortgage payments, |package. |

|The maturity of the loan is extended, but does not |No VA approval is needed. |

|exceed the maximum of 30 years and 32 days or the | |

|remaining economic life of the property as provided by |Include an explanation of the change with the closing |

|the NOV, and there is no increase in the monthly |package. |

|mortgage payments, | |

|The loan amount is increased to cover the cost of energy|No VA approval is needed. |

|efficiency improvements up to $6,000, | |

| |See section 3 of chapter 7 for special underwriting |

| |requirements and documentation required with the closing|

| |package. |

|Discount points to be paid by the applicant increase by |No VA approval is needed. |

|any amount over the points indicated on the Certificate | |

|of Commitment, |Include with closing package: |

| |An explanation of the change. |

| |The URLA with changes initialed and dated by the |

| |applicant. |

| |If previously verified assets are not sufficient to |

| |cover the additional points, verification of sufficient |

| |additional assets. |

Continued on next page

4. Prior Approval Loan Procedures, Continued

|f. Changes Occurring After Issuance of the Certificate of Commitment (continued) |

|If … |Then … |

|The loan is to be closed at an interest rate more than 1% |VA approval is needed. |

|greater than the rate indicated on the Certificate of | |

|Commitment, |Submit the Certificate of Commitment and a new URLA, |

| |signed and dated by the applicant, or the original |

| |URLA with the change initialed and dated by the |

| |applicant, to VA for re-underwriting. |

|g. Conditional |VA may issue a conditional commitment in the following seven types of cases. The lender must ensure compliance |

|Commitments |with the condition prior to loan closing. |

|Case |Condition/Notation on Certificate |

|Loan is to the spouse of a |“Prior to closing the subject loan, the lender should obtain assurance from|

|serviceperson missing in action or |the borrower that official notice of any change in the servicemember’s |

|prisoner of war (MIA/POW) |status has not been received and that the applicant is still the spouse of |

| |the servicemember.” |

| | |

| |Reference: See section 6 of this chapter for required documentation. |

|Loan is to the unmarried surviving |“Conditioned on borrower’s certification that status as an unmarried |

|spouse of an eligible, deceased veteran|surviving spouse has not changed since the Certificate of Eligibility was |

| |issued.” |

| | |

| |Reference: See section 6 of this chapter for required documentation. |

Continued on next page

4. Prior Approval Loan Procedures, Continued

|g. Conditional Commitments (continued) |

|Case |Condition/Notation on Certificate |

|Loan is to a service person who |“Certification of active duty status as of date of note required.” |

|has not received an honorable | |

|discharge and must certify to |To ensure compliance, check the active duty box in Section III, Veteran’s |

|continuous active duty |Certifications, on VA Form 26-1820, Report and Certification of Loan |

| |Disbursement. Ensure that the veteran signs the form. |

|Loan is to a veteran and |“Conditioned on proof of marriage prior to loan closing.” |

|fiancé/fiancée who intend to marry| |

|prior to loan closing - title is |A copy of the applicant’s marriage certificate or other proof of marriage must be|

|to be taken in the name of veteran|submitted with the closing package. A marriage license is inadequate. |

|and spouse | |

|Loan involves use of an attorney |“No evidence of guaranty with respect to the loan to which this commitment |

|in fact |relates will be issued by the Secretary unless the lender makes the certification|

| |specified by the Department of Veterans Affairs at the time the lender requests a|

| |certificate of guaranty to the effect that the veteran was alive and, if the |

| |veteran is on active military duty, not in a “missing in action” status on the |

| |date the note and security instruments were executed on the veteran’s behalf by |

| |the attorney-in-fact.” |

| | |

| |Reference: See section 6 of this chapter for required documentation. |

Continued on next page

4. Prior Approval Loan Procedures, Continued

|g. Conditional Commitments (continued) |

|Case |Condition/Notation on Certificate |

|Veteran intends to sell property |“This commitment is conditioned upon submission of evidence of disposal of the |

|on which he/she has an existing VA|property which the veteran now owns and previously purchased using VA entitlement|

|loan prior to closing on the new |and evidence that the loan has been paid in full or that an eligible veteran has |

|VA loan, in order to have |substituted his or her entitlement for that used by the original veteran.” |

|entitlement restored | |

| |Reference: See section 6 of this chapter for required documentation. |

|Veteran intends to sell property |“This commitment is conditioned upon the consummation of the sale of residential |

|in order to have sufficient income|real property now owned by the veteran, as proposed in the loan application.” |

|and/or assets to qualify for the | |

|loan |Reference: See section 6 of this chapter for required documentation. |

|h. Joint Loans |See section 1 of chapter 7. |

|i. Before Closing |Complete all applicable procedures in section 2 of this chapter. |

Continued on next page

4. Prior Approval Loan Procedures, Continued

|j. How to Report Loan |A loan must be reported to VA within 60 days of closing. A lender that fails to meet this time limit must provide|

|Closing and Request |a written explanation (see item 8 below). |

|Guaranty | |

| |To report a prior approval loan, submit the following documents to VA, in the order listed. |

|Order |Document |

|1 |Lender’s cover or transmittal letter (if used). |

|2 |VA Form 26-0286, VA Loan Summary Sheet. |

|3 |VA Form 26-1820, Report and Certification of Loan Disbursement. |

|4 |Lender’s quality certification per 38 CFR part 36 and 38 U.S.C. Chapter 37 (See step 7 of the Lender|

| |Procedures in section 1 of chapter 4). |

|5 |HUD-1, Settlement Statement. |

|6 |Evidence of compliance with MCRV or NOV requirements; for example, final compliance inspection, |

| |termite certification, warranty, etc. |

|7 |If a loan is submitted more than 60 days after loan closing, a statement signed by a corporate |

| |officer of the lender that identifies the loan and provides the specific reason(s) why the loan was |

| |not submitted on time. |

|8 |Any other necessary documents. |

| | |

| |Reference: See section 6 of this chapter. |

5. Automatically Closed Loan Procedures

|Change Date |September 29, 2008, Change 7 |

| |Subsection a has been updated to include the electronic loan guaranty submission procedure and to reflect the |

| |modified guaranty submission procedure (if necessary). The list in this section has been renumbered. |

| |Subsection b has been added to identify full review procedures and delete the funding fee receipt requirement. |

|a. How to Request |Loan Guaranty Certificate (LGC) is the lender's record that VA has guaranteed the loan. See section 11 of chapter|

|Guaranty |3 for an explanation of what evidence of guaranty means to the lender. |

| | |

| |Lenders are strongly encouraged to use VA’s web-based Loan Guaranty program, webLGY (available through the VA |

| |Portal) to obtain electronic LGCs. This program enables participating lenders to electronically submit a loan to |

| |VA for guaranty. |

| | |

| |Lenders benefit from this type of processing in many ways, including: |

| |Almost immediate receipt of the LGC. |

| |No need to mail loan documents to VA (unless selected for an audit review). |

| |Ability to submit loans for guaranty virtually anytime. |

| |No need to complete VA Form 26-0286, VA Loan Summary Sheet. |

| |Ability to deliver final documents to investors quickly, enabling investors to purchase pool loans faster, which |

| |reduces costs of carrying the loan. |

| | |

| |Note: Lenders must ensure that all required documents listed in subsection b below are retained and available to |

| |submit to VA for possible future audit requests. |

Continued on next page

5. Automatically Closed Loan Procedures, Continued

|a. How to Request Guaranty (continued) |

|If a lender is unable to obtain an electronic LGC, the following documents should be submitted to VA, in the order listed. VA will then |

|issue the LGC or notify the lender of additional information needed for LGC issuance. |

| |

|Order |Document |

|1 |VA Form 26-0286, VA Loan Summary Sheet. |

|2 |Certificate of Eligibility. |

|3 |Notice of Value (NOV) or copy of Master Certificate of Reasonable Value (MCRV) with the home model |

| |and any selected options highlighted. |

|4 |VA Form 26-1820, Report and Certification of Loan Disbursement. |

|5 |HUD-1, Settlement Statement. |

|6 |Name, mailing address, and e-mail address to be used in requesting file for full review or post |

| |audit. |

|7 |If a loan is submitted more than 60 days after loan closing, a statement signed by a corporate |

| |officer of the lender which identifies the loan, provides the specific reasons for late reporting and|

| |certifies that the loan is current. This statement must be submitted with any late request for |

| |issuance of a Loan Guaranty Certificate. |

|b. Full Review Procedures|Lenders will be notified, either immediately by the web-based system or in writing by VA offices, when a loan has |

| |been selected for full review. Lenders must forward the complete loan file to the appropriate VA office within 15|

| |days of receiving notification from VA. |

| | |

| |Note: If VA finds significant deficiencies in a loan submission, the lender will be notified. |

| | |

| |The following documents should be submitted when a full review notification has been received: |

|Order |Document |

|1 |Lender’s cover or transmittal letter (if used). |

|2 |VA Form 26-0286, VA Loan Summary Sheet. |

|3 |Certificate of Eligibility. |

|4 |VA Form 26-6393, Loan Analysis. |

Continued on next page

5. Automatically Closed Loan Procedures, Continued

|b. Full Review Procedures|

|(continued) |

|Order |Document |

|5 |For Automated Underwriting cases: Feedback Certificate and underwriter’s certification (acceptable |

| |variations on the documentation required in items 17, 18, and 19 below, and the underwriter’s |

| |certification, are explained in section 8 of chapter 4). |

|6 |VA Form 26-1820, Report and Certification of Loan Disbursement. |

|7 |Lender’s quality certification per 38 CFR part 36 and 38 U.S.C. Chapter 37 (See step 7 of the Lender |

| |Procedures in section 1 of chapter 4.). |

|8 |VA Form 26-8937, Verification of VA Benefits (if applicable). |

|9 |HUD-1, Settlement Statement. |

|10 |Evidence of compliance with MCRV or NOV requirements; such as, final compliance inspection, termite |

| |certification, and/or warranty. |

|11 |If a loan is submitted more than 60 days after loan closing, a statement signed by a corporate |

| |officer of the lender which identifies the loan, provides the specific reasons for late reporting and|

| |certifies that the loan is current. This statement must be submitted with any late request for |

| |issuance of a Loan Guaranty Certificate. |

|12 |Interest Rate and Discount Disclosure Statement. |

|13 |VA Form 26-0592, Counseling Checklist for Military Homebuyers, if applicant is on active duty. |

|14 |Uniform Residential Loan Application (URLA) with revised VA Form 26-1802a, HUD/VA Addendum to URLA. |

| | |

| |These forms may be signed and dated anytime from the date of initial application to the date of loan |

| |closing. |

| |These forms must be properly completed and legible, but do not have to be typed. |

|15 |All original credit reports obtained in connection with the loan and any related documentation. |

|16 |VA Form 26-8497, Request for Verification of Employment, and other verifications of income such as |

| |pay stubs and tax returns. |

| | |

| |Reference: See section 2 of chapter 4. |

|17 |VA Form 26-8497a, Request for Verification of Deposit, and other related documents (Alternative |

| |documentation: Original or certified true copies of last 2 bank statements). |

|18 |Purchase/earnest money contracts. |

Continued on next page

5. Automatically Closed Loan Procedures, Continued

|b. Full Review Procedures|

|(continued) |

|Order |Document |

|19 |LAPP NOV and any special requirements or conditions applicable to the property. |

| |VA Form 26-1843a, Master Certificate of Reasonable Value (MCRV), with any applicable endorsements |

| |and/or change orders. |

| | |

| |Highlight to show lot and block identification, house type valuation, and optional equipment |

| |applicable to veteran’s purchase. |

|20 |The original Freddie Mac Form 70/Fannie Mae Form 1004, Uniform Residential Appraisal Report (URAR), |

| |including all addendums, photographs and any document(s) revising or correcting the fee appraiser’s |

| |original URAR. |

| | |

| |Note: The URAR and attending information is not required when VA Form 26-1843a, MCRV, is submitted. |

|21 |Any other necessary documents. |

| | |

| |Reference: See section 6 of this chapter. |

6. Submit “Other Necessary Documents”

|Change Date |September 29, 2008, Change 7 |

| |Subsection a has been modified by adding an example of “other documents.” |

| |Subsection b has been changed to delete VA Form 26-1847, Request for Postponement of Offsite or Onsite |

| |Improvements-Home Loan, and VA Form 26-6378, Escrow Agreement for Postponed Exterior Offsite Improvements, which |

| |have been discontinued. |

|a. What are Other |Other necessary documents are verifications, explanations, forms, etc., that are either: |

|Necessary Documents? | |

| |Required by VA under certain circumstances, or |

| |Necessary to clarify some aspect of the loan or the borrower’s qualifications. (For example, lender and/or |

| |borrower explanations for adverse credit.) |

|b. Circumstances |The table below provides some of the circumstances for which VA requires specific additional documentation to be |

|Requiring Additional |submitted with the loan closing package. |

|Documents | |

|Circumstances |Required Documentation |

|Loan includes funds for energy |Improvements of $3,000 to $6,000: |

|efficiency improvements. |Documentation of the lender’s determination that the increase in monthly |

| |mortgage payments does not exceed the likely reduction in monthly utility |

| |costs. |

| | |

| |Improvements up to $6,000: |

| |Evidence of the cost of improvements such as a copy of the bid(s) or |

| |contract itemizing the improvements and their cost. |

| | |

| |Improvements over $6,000: |

| |Documentation of VA’s valuation of the energy efficiency improvements. |

| | |

| |Reference: See section 3 of chapter 7 for details, including special |

| |provisions for Interest Rate Reduction Loans (IRRRLs). |

Continued on next page

6. Submit “Other Necessary Documents”, Continued

|b. Circumstances Requiring Additional Documents (continued) |

|Circumstances |Required Documentation |

|Postponed completion of exterior |VA Form 26-1849, Escrow Agreement for Postponed Exterior Onsite Improvements.|

|improvements. | |

| |Reference: See section 9 of chapter 9. |

|Loan involves use of an attorney in |Power of attorney requirements as described in section 7 of chapter 9, |

|fact. |including written evidence of the veteran’s consent to the specific |

| |transaction, plus the lender certification found under the “Requirements” |

| |heading. |

|Veteran intended to sell property on |A completed VA Form 26-1880, Request for a Certificate of Eligibility, and |

|which he/she has an existing VA loan |Evidence that the veteran has sold the property and either |

|prior to closing on the new VA loan, in|evidence that the veteran has fully repaid the prior loan, or |

|order to have entitlement restored. | |

| |Note: A HUD-1, Settlement Statement, clearly showing sale of the property by|

| |the veteran and pay-off of the prior VA loan, satisfies this requirement. |

| | |

| |documentation that the veteran can be released from liability and the assumer|

| |meets the requirements for substitution of entitlement. |

|Veteran intended to sell property in |Lender’s certification that the sale of the veteran’s property has been |

|order to have sufficient income and/or |completed and the proceeds disbursed. |

|assets to qualify for the loan. | |

| |Note: The lender’s certification must be based on examination of a HUD-1, |

| |Settlement Statement, or other appropriate documentation of the transaction. |

Continued on next page

6. Submit “Other Necessary Documents”, Continued

|b. Circumstances Requiring Additional Documents (continued) |

|Circumstances |Required Documentation |

|Loan is to the unmarried surviving |The following affidavit obtained from the surviving spouse at the time of |

|spouse of an eligible, deceased |loan closing: |

|veteran. | |

| |“I, ________, being first duly sworn, on oath, say, that, on the __ day of |

| |______, 2___ (insert date loan was closed), I am (was) the unmarried |

| |surviving spouse of _________ and that I make this affidavit for the express |

| |purpose of inducing _______ to make a loan to me and/or for inducing the |

| |Department of Veterans Affairs to guarantee or insure such loan, knowing that|

| |it is a criminal offense to make a false statement for this purpose; and that|

| |the above and foregoing is true and correct.” |

| |_____________ _______________________ |

| |Notary’s jurat Signature of surviving spouse |

|Loan is to the spouse of a |Documentation that, at the time of loan closing, the lender asked the |

|serviceperson missing in action or |applicant and the applicant provided verbal assurance that: |

|prisoner of war (MIA/POW). | |

| |No official notice of any change in the service member’s status had been |

| |received, and |

| |Applicant was still the spouse of the service member. |

|Supplemental loan for home |See “Procedures” in section 5 of chapter 7. |

|improvements. | |

|Graduated Payment Mortgage (GPM). |Veteran’s statement acknowledging payment increases. |

| | |

| |Reference: See section 7 of chapter 7. |

|Restrictions exist on the purchase or |Veteran’s written consent to the restrictions (obtained at the time of loan |

|resale of the property the veteran is |application). |

|purchasing. | |

| |Reference: See section 2 of chapter 9. |

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